[Federal Register Volume 78, Number 186 (Wednesday, September 25, 2013)]
[Notices]
[Pages 59032-59034]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-23353]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request; Extension

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Notice.

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SUMMARY: The FTC intends to ask the Office of Management and Budget 
(``OMB'') to extend through February 28, 2017, the current Paperwork 
Reduction Act (``PRA'') clearance for the FTC's enforcement of the 
information collection requirements in its regulation ``Used Motor 
Vehicle Trade Regulation Rule'' (``Used Car Rule'' or ``Rule''), which 
applies to used vehicle dealers. That clearance expires on February 28, 
2014.

DATES: Comments must be filed by November 25, 2013.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Used Car Rule, PRA 
Comment, P137606'' on your comment and file your comment online at 
https://ftcpublic.commentworks.com/ftc/usedcarrulepra by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, mail or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Room H-113 (Annex 
J), 600 Pennsylvania Avenue NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: John C. Hallerud, Attorney, Midwest 
Region, Federal Trade Commission, 55 West Monroe, Suite 1825, Chicago, 
IL 60603, 312-960-5634.

SUPPLEMENTARY INFORMATION: The Used Car Rule promotes informed 
purchasing decisions by requiring used car dealers to disclose 
information about warranty coverage, if any, and purchasing advice on 
used cars that they offer for sale. The Rule requires that used car 
dealers display a form called a ``Buyers Guide'' on each used car 
offered for sale that, among other things, discloses information about 
warranty coverage.
    Burden statement:
    Under the PRA, 44 U.S.C. 3501-3521, Federal agencies must get OMB 
approval for each collection of information they conduct or sponsor. 
``Collection of information'' includes agency requests or requirements 
to submit reports, keep records, or provide information to a third 
party. 44 U.S.C. 3502(3); 5 CFR 1320.3(c). The Rule has no 
recordkeeping or reporting requirements; as detailed further under the 
Request for Comment, the FTC seeks clearance for the Rule's disclosure 
requirements and the estimated PRA burden for them.
    Estimated total annual hours burden: 2,296,227 hours.
    As explained in more detail below, this estimate is based on the 
number of used car dealers (55,432 \1\), the number of used cars sold 
by dealers annually (approximately 28,958,000 \2\), and the time needed 
to fulfill the information collection tasks required by the Rule.\3\
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    \1\ 37,892 independent dealers in 2012. NIADA Used Car Industry 
Report (2013), at 16. 17,540 franchised new car dealers in 2012. 
NADA Data State-of-the Industry Report 2013, at 5.
    \2\ The number of used car sales conducted by dealers in 2012 is 
calculated by multiplying the percentage of used car sales conducted 
by dealers (71.5%) by the 40.5 million used cars sold in 2012. NIADA 
Used Car Industry Report (2013),16-17. In 2012, franchised new car 
dealers conducted 36.9%, and independent used car dealers conducted 
34.6%, of used car sales. Id. Private parties sold the remaining 
used cars. Id.
    \3\ Some dealers opt to contract with outside contractors to 
perform the various tasks associated with complying with the Rule. 
Staff assumes that outside contractors would require about the same 
amount of time and incur similar cost as dealers to perform these 
tasks. Accordingly, the hour and cost burden totals shown, while 
referring to ``dealers,'' incorporate the time and cost borne by 
outside companies in performing the tasks associated with the Rule. 
The time estimates repeat those that the FTC published, without 
receiving public comment, when the FTC last pursued renewed 
clearance for the Rule. See 75 FR 62538 (Oct. 12, 2010); 76 FR 144 
(Jan. 3, 2011). Absent prospective specific industry estimates to 
the contrary, staff will continue to apply these estimates.
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    The Rule requires that used car dealers display a one-page, double-
sided Buyers Guide on each used car that they offer for sale. The 
component tasks associated with the Rule's required display of Buyers 
Guides include: (1) Ordering and stocking Buyers Guides; (2) entering 
data on Buyers Guides; (3) displaying the Buyers Guides on vehicles; 
(4) revising Buyers Guides as necessary; and (5) complying with the 
Rule's requirements for sales conducted in Spanish.
    1. Ordering and Stocking Buyers Guides: Dealers should need no more 
than an average of two hours per year to obtain Buyers Guides, which 
are readily available from many commercial printers or can be produced 
by an office word-processing or desk-top publishing system.\4\ Based on 
an estimated population of 55,432 dealers in 2012, the annual hours 
burden for producing or obtaining and stocking Buyers Guides is 110,864 
hours.
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    \4\ Buyers Guides are also available online from the FTC's Web 
site, www.ftc.gov, at http://business.ftc.gov/selected-industries/automobiles.
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    2. Entering Data on Buyers Guides: The amount of time required to 
enter applicable data on Buyers Guides may vary substantially, 
depending on whether a dealer has automated the process. For used cars 
sold ``as is,'' copying vehicle-specific data from dealer inventories 
to Buyers Guides and checking the ``No Warranty'' box may take two to 
three minutes per vehicle if done by hand, and only seconds for those 
dealers who have automated the process or use pre-printed forms. Staff 
estimates that dealers will require an average of two minutes per 
Buyers Guide to complete this task. Similarly, for used cars sold under 
warranty, the time required to check the ``Warranty'' box and to add 
warranty information, such as the additional information required in 
the Percentage of Labor/Parts and the Systems Covered/Duration sections 
of the Buyers Guide, will depend on whether the dealer uses a manual or 
automated process or Buyers Guides that are pre-printed with the 
dealer's standard warranty terms. Staff estimates that these tasks will 
take an average of one additional minute, i.e., cumulatively, an 
average total time of three minutes for each used car sold under 
warranty.
    Staff estimates that dealers sell approximately fifty percent of 
used cars ``as is'' and the other half under warranty. Therefore, staff 
estimates that the overall time required to enter data on Buyers Guides 
consists of 482,633 hours for used cars sold without a warranty 
(28,958,000 vehicles x 50% x 2 minutes per vehicle) and 723,950 hours 
for used cars sold under warranty (28,958,000 vehicles x 50% x 3 
minutes per vehicle) for a cumulative estimated total of 1,206,583 
hours.
    3. Displaying Buyers Guides on Vehicles: Although the time required 
to display the Buyers Guides on each used car may vary substantially, 
FTC staff estimates that dealers will spend an average of 1.75 minutes 
per vehicle to match the correct Buyers Guide to the vehicle and to 
display it on the vehicle. The estimated burden associated with this 
task is approximately 844,608 hours for the 28,958,000 vehicles sold in 
2012 (28,958,000 vehicles x 1.75 minutes per vehicle).
    4. Revising Buyers Guides as Necessary: If negotiations between the

[[Page 59033]]

buyer and seller over warranty coverage produce a sale on terms other 
than those originally entered on the Buyers Guide, the dealer must 
revise the Buyers Guide to reflect the actual terms of sale. According 
to the original rulemaking record, bargaining over warranty coverage 
rarely occurs. Staff notes that consumers often do not need to 
negotiate over warranty coverage because they can find vehicles that 
are offered with the desired warranty coverage online or in other ways 
before ever contacting a dealer. Accordingly, staff assumes that 
dealers will revise the Buyers Guide in no more than two percent of 
sales, with an average time of two minutes per revision. Therefore, 
staff estimates that dealers annually will spend approximately 19,305 
hours revising Buyers Guides (28,958,000 vehicles x 2% x 2 minutes per 
vehicle).
    5. Spanish Language Sales: The Rule requires dealers to make 
contract disclosures in Spanish if the dealer conducts a sale in 
Spanish.\5\ The Rule permits displaying both an English and a Spanish 
language Buyers Guide to comply with this requirement.\6\ Many dealers 
with large numbers of Spanish-speaking customers likely will post both 
English and Spanish Buyers Guides to avoid potential compliance 
violations.
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    \5\ 16 CFR 455.5.
    \6\ Id.
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    Calculations from United States Census Bureau surveys indicate that 
approximately 5.6 percent of the United States population speaks 
Spanish at home, without also speaking fluent English.\7\ Staff 
therefore projects that dealers will conduct approximately 5.6 percent 
of used car sales in Spanish. Dealers will incur the additional burden 
of completing and displaying a second Buyers Guide in 5.6 percent of 
sales assuming that dealers choose to comply with the Rule by posting 
both English and Spanish Buyers Guides. The annual hours burden 
associated with completing and displaying Buyers Guides is 2,051,191 
hours (1,206,583 hours for entering data on Buyers Guides + 844,608 
hours for displaying Buyers Guides). Therefore, staff estimates that 
the additional burden caused by the Rule's requirement that dealers 
display Spanish language Buyers Guides when conducting sales in Spanish 
is 114,867 hours (2,051,191 hours x 5.6% of sales). The other 
components of the annual hours burden, i.e., purchasing Buyers Guides 
and revising them for changes in warranty coverage, remain unchanged.
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    \7\ U.S. Census Bureau, TableB16001. Language Spoken at Home. 
2011 American Community Survey 1-Year Estimates, available at: 
http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_11_1YR_B16001&prodType=table (5.6% of 
the United States population 5 years or older who speaks Spanish or 
Spanish Creole in the home speaks English less than ``very well.'').
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    Estimated annual cost burden: $32,307,914 in labor costs and 
$8,687,400 in non-labor costs.
    1. Labor costs: Labor costs are derived by applying appropriate 
hourly cost figures to the burden hours described above. Staff has 
determined that all of the tasks associated with ordering forms, 
entering data on Buyers Guides, posting Buyers Guides on vehicles, and 
revising them as needed, including the corresponding tasks associated 
with Spanish Buyers Guides, are typically done by clerical or low-level 
administrative personnel. Using a clerical cost rate of $14.07 per hour 
\8\ and an estimated burden of 2,296,227 hours for disclosure 
requirements, the total labor cost burden is $32,307,914 ($1,407 per 
hour x 2,296,277 hours).
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    \8\ The hourly rate is based on the Bureau of Labor Statistics 
estimate of the mean hourly wage for office clerks, general. 
Occupational Employment and Wages, May 2012, 43-9061 Office Clerks, 
General, available at: http://www.bls.gov/oes/current/oes439061.htm#nat.
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    2. Capital or other non-labor costs: Although the cost of Buyers 
Guides can vary considerably, staff estimates that the average cost of 
each Buyers Guide is thirty cents based on industry input. Therefore, 
the estimated cost of Buyers Guides for the 28,958,000 used cars sold 
by dealers in 2012 is approximately $8,687,400. In making this 
estimate, staff conservatively assumes that all dealers will purchase 
pre-printed forms instead of producing them internally, although 
dealers may produce them at minimal expense using current office 
automation technology. Capital and start-up costs associated with the 
Rule are minimal.
    Request for Comment: Pursuant to Section 3506(c)(2)(A) of the PRA, 
the FTC invites comments on: (1) Whether the disclosure requirements 
are necessary, including whether the information will be practically 
useful; (2) the accuracy of our burden estimates, including whether the 
methodology and assumptions used are valid; (3) how to improve the 
quality, utility, and clarity of the disclosure requirements; and (4) 
how to minimize the burden of providing the required information to 
consumers. All comments should be filed as prescribed in the ADDRESSES 
section above, and must be received on or before November 25, 2013.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before November 25, 
2013. Write ``Used Car Rule, PRA Comment, P137606'' on your comment. 
Your comment--including your name and your state--will be placed on the 
public record of this proceeding, including to the extent practicable, 
on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to 
remove individuals' home contact information from comments before 
placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone's Social Security number, 
date of birth, driver's license number or other state identification 
number or foreign country equivalent, passport number, financial 
account number, or credit or debit card number. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which is . . . privileged or confidential'' as provided in Section 6(f) 
of the FTC Act 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16CFR 
4.10(a)(2). In particular, do not include competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns devices, manufacturing processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c).\9\ Your comment will be kept confidential only if 
the FTC General Counsel grants your request in accordance with the law 
and the public interest.
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    \9\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
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    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/usedcarrulepra, by following the instructions on the web-based 
form. If this Notice appears at http://www.regulations.gov/#!home, you 
also may file a comment through that Web site.

[[Page 59034]]

    If you file your comment on paper, write ``Used Car Rule, PRA 
Comment, P137606,'' on your comment and on the envelope, and mail or 
deliver it to the following address: Federal Trade Commission, Office 
of the Secretary, Room H-113 (Annex J), 600 Pennsylvania Avenue NW., 
Washington, DC 20580. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Visit the Commission Web site at www.ftc.gov to read this Notice. 
The FTC Act and other laws that the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. The Commission will consider all timely and responsive 
public comments that it receives on or before November 25, 2013. You 
can find more information, including routine uses permitted by the 
Privacy Act, in the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

David C. Shonka,
Principal Deputy General Counsel.
[FR Doc. 2013-23353 Filed 9-24-13; 8:45 am]
BILLING CODE 6750-01-P